Is this Corona Crisis a Good Opportunity for Investor to Enter?

We recently encountered a crisis that has never happened before in our lifetime. The coronavirus outbreak is a time where we, as humankind, met an unexpected event. The outbreak of Covid-19, a novel coronavirus strain which originated in China but has since gone global and it is a big deal. Everyone worldwide has been affected by this event. It has hit us all hard. Around the world, people get sick and die; schools close, the healthcare system is overloaded, employees lose their jobs, companies face bankruptcy, stock markets collapse, and countries have to spend billions on bailouts and medical aid.

Due to this corona crisis, businesses worldwide are severely impacted by running its regular operation. The global stock market has dropped severely from this stunning event. The Covid-19 is a huge stressor shaking up our psyche, triggering our fears and uncertainties.

Economists from all over the world mentioned that chaos is still out there. This results from many to pull their money from investments to protect from further losses. Even the legendary investor Warren Buffett just mentioned recently in Berkshire shareholder conference that he is not investing further and will hold cash at the moment. These fears around the world have created an atmosphere for many people not to invest their money, and instead hold some money for now being.

No matter how serious and sad all of this is, there are upsides as well. I have a different opinion regarding this crisis that is happening right now. If you have a long term horizon towards your investment career, investors should ignore the noises that are occurring right now. There is a famous quote by Warren Buffet to be fearful when others are greedy, and be greedy when others are fearful. I believe that people who have spare cash to invest should start investing if they see an opportunity and value in the stock market. In this article, I will discuss the reasons why this corona crisis will be an excellent opportunity to buy great values in the stock market and start accumulating positions in companies that will still be in business decades ahead. 

See This Event as an Opportunity.

Crisis events like this don’t always come by. Before this event, we recently have encountered a bull market that lasts for a long time. Investors should use this time to invest in the stock market.

People who missed investing in the stock market since the home mortgage crisis should take this moment to accumulate wealth in the stock market. If you are one of those people who didn’t take the opportunity to invest during the housing crisis in 2008 should learn that in the long-run horizon, the stock market always recovers from problems.

I recalled during 2008 and 2009 that people were so scared to enter the stock market, thinking that the world is going under, and there is no hope in the economy. It’s actually during times like this when people should deploy their money to invest. During a crisis like this, many great companies are selling at a discount giving investors great value for their investment.  

Instead of treating this event as an issue, treat this tragic event as an opportunity to invest in quality companies at a great price. Warren Buffet, who is known as the legendary investor, always takes advantage to invest in horrific times like this one. He is happy in investing since many great quality businesses are priced at a bargain. He ends up accumulating more shares of companies in his portfolio. Instead of running away from the stock market, people should run towards them, building a portfolio of long-term winning assets at heavily discounted prices.

Use Dollar-Cost Average Strategy If You Feel Unsure.

If you are still unsure whether to invest now or wait for more falls in the stock market, then using the dollar-cost averaging method can be the way to go. By using the dollar cost average method to your investing, you can gradually invest your money during this crisis. 

You also will feel more secure knowing that you are accumulating shares of companies during this time and, at the same time, not feeling scared seeing your investment principle go down in value.

I personally am investing in the stock market using a dollar-cost average. With the money I receive monthly (rental income & dividends), I am deploying them to purchase great companies that have the potential to go up in value in the long run.

See the Long term Horizon instead of Short-term Volatility. 

If you are investing using a dollar-cost average strategy or lump sum, remember to ignore what the stock market is doing in the short term. Stock prices always fluctuate with the news that is happening. Instead of worrying about what the stock price is doing in the near term, always remember that the stock market has a lot of potential gain in the long run. 

The stock market around the world has gone through many crises, and in the long run, the stock market always goes up in value in the long run. For example, the United States of America has many crises, such as the great depression that occurred in 1929. However, if you invest long term horizon, your investment will always increase in value. Peter Lynch quotes how volatility will occur and markets will continue to have these ups and downs. He also mentioned how this could be a great opportunity if people can understand the value of the stock they own. So don’t worry about the short-term volatility that is occurring at this moment.

The Path to Wealth is to be Discipline with Your Investment.

The path of creating wealth is to be disciplined with your investment contribution. No one gets wealthy, in an instance. They are dedicated to keep investing and to be patient. Warren Buffet didn’t become wealthy overnight. It’s because he has been investing all the time during his lifetime.

By utilizing this crisis moment to accumulate, stocks will bring a huge return in the future. It’s similar to working out at the gym. You won’t see the result just by going to the gym once in a blue moon. Instead, you will see the result when you dedicate your life to go to the gym every day and to be disciplined with your workout routine. When you are disciplined with what you are doing, you will then see the result with the time you commit towards that goal.

In Conclusion

From this article, we can conclude why investing during this coronavirus pandemic is beneficial for investors to invest in the long run. Moments like this don’t always come by. Investors should see this time as an opportunity instead of a tragic event.

By being disciplined with your contribution to your investment can make you wealthy futures ahead. No one becomes wealthy in an instance. Instead, they dedicate to keep investing and remember that decade ahead; your investment will create great wealth for you. So use this opportunistic moment to start investing and accumulate shares in great companies that are listed in the stock market. You will create significant wealth in the future.